Regulation of backhaul

I think that in the light of the lack of alternative investment in backhaul from Telstra exchanges, and providers naming many exchanges as ‘too expensive’ to invest into, as a result of Telstra’s backhaul being unfairly priced.

So to me, there is a lack of investment in backhaul, and the reason for that would at least seem to evolve around two likely reasons.

1. Lack of demand for alternative backhaul.

It’s unclear whether the current ADSL2+ providers are looking to invest in regional areas, whether they are after alternative backhaul to do that.

It looks to me that they aren’t, as I am sure that if they were serious, they would at least group together and put a grouped tender out for the provision of backhaul to certain high demand exchanges.

The backhaul Telstra charges is expensive, and so the demand for it is simply not put forward by them grouping together and determining where the common goal posts are for them in exchanges.

There’s no doubt to me that multiple provider rollouts in the regional areas aren’t viable for more than 2 real providers, this is due to lack of demand for higher speed broadband services (and the fact that the ignorant will always be just that, the ignorant).

The other reason that comes to mind..

2. Fear of lack of return on investment.

I think this is also a possibility. Investing in alternative backhaul to a Telstra exchange only really has a source of return on investment, that source is ADSL2+ providers, and perhaps near by business demand for backhaul.

Perhaps they are fearful of the outcome of FTTN, which might see that backhaul quickly underutilised and made useless, because the customers serviced would be by node and therefore not attracting the sufficient business.

We do need it, sooner or later, competition in backhaul to regional areas, just like we need competition in infrastructure.

Telstra’s got a stranglehold on the market, and it’s too tight for infrastructure investment to take place.

If the business case for investment in backhaul doesn’t exist, then the backhaul that does exist needs to be regulated tightly by the ACCC until a business case finds its way into the industry.

The lack of regulation on backhaul (to prices metro comparable) is hurting investment into regional areas. Numerous ISPs have confirmed that. The fix is either get cables out there, or regulate a bit more until the situation where investment can take place, and be feasible appears.


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